Exhibit 10.1
LICENSE AND DISTRIBUTION AGREEMENT
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This agreement dated as of the 21st day of September, 2000
BETWEEN:
THERMO ENZYME PRODUCTS INC., a company formed under the laws of
British Columbia having an address at 8412 Armstrong Road, Langley,
British Columbia V1M 3P5
(the "Licensor")
AND:
DURO ENZYME SOLUTIONS INC., a corporation formed under the laws of the
State of Nevada and having an address at 50 West Liberty, Suite 880,
Reno, Nevada 89501
(the "Licensee")
WHEREAS:
A. The Licensor is the owner of all rights to, title to, and interest in
certain technology (and certain patents, trade secrets, application for patents
pending and registered trade names and has developed expertise and skill
pertaining to the DuroZyme process and plants and 3SF Technology as more
particularly described in Schedule "A" hereto and other and further areas
related thereto which are not specifically enumerated herein in respect of which
the Licensor has conducted research and developed expertise and skills (all
hereinafter collectively referred to as the "Technology");
B. Licensee and Licensor have agreed that Licensee shall conduct research
and development in connection with the extension of the state of the art of the
Technology and the commercial exploitation of the Technology, Present Technology
and Developed Technology and shall be entitled to avail itself of the Technology
Present Technology and Developed Technology and of the know-how and expertise of
the Licensor for such purposes;
C. The Licensor acquired all its property rights, interest and future
interest in the technology herein from Dan Cumming, Rene Branconnier and Robert
Jackman who, together as Transferors therein, entered into a certain General
Conveyance in favour of the Licensor as Transferee therein.
NOW THEREFORE in consideration of the premises and of the sum of $10.00 and
other good and valuable consideration now paid and given, (the receipt and
sufficiency of which are hereby acknowledged by the parties), the parties hereby
covenant and agree each with the other as follows:
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ARTICLE I
DEFINITIONS
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1.1 As used herein the following words shall have the following meaning:
(a) "Affiliate" means that term defined in the Company Act (British
Columbia);
(b) "Developed Technology" means all technical information, know-how and
skills developed or to be developed by the Licensee as a result of the
Licensee's Research and Development Program in Canada or elsewhere in
the world whether or not such technical information, know-how and
skills relate to the Present Technology;
(c) "Exclusive Territory" means all areas within the world;
(d) "know-how" means information including, without limitation, invention
records, research records and reports, developments, reports,
experimental and other engineering reports, pilot equipment designs,
quality control reports and specifications, models, tools and parts,
manufacturing and production techniques, processes, methods or any
other information relating to or concerning the Technology, the
Present Technology or Developed Technology arising out of the
Licensee's Research and Development Program;
(e) "Licensee's Research and Development Program" means the research and
development in respect of the Technology, Present Technology and
Developed Technology to be conducted by the Licensee in Canada or
elsewhere in the world in which the Licensor has agreed to participate
as may be more particularly set out pursuant to one or more agreements
entered into by the Licensee, the Licensor and others; and
(f) "Present Technology" means all technical information, know-how and
techniques relating to those items set forth in Recital A or
otherwise, developed prior to the date hereof by the Licensor.
ARTICLE II
GRANT OF EXCLUSIVE LICENSE
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2.1 Licensor hereby grants to Licensee an exclusive license (the "License") to
use the Technology, the Present Technology and Developed Technology
anywhere in the world for the term of this Agreement for the purposes of
conducting research and development in connection with those items stated
in Recital B and on the terms and conditions herein set forth. The Licensor
hereby represents and warrants to the Licensee that the Licensor has the
right to grant the license to use the Technology and Present Technology for
the purposes and on the terms and conditions set forth herein, and hereby
covenants and agrees to forthwith following the execution of this Agreement
to take all necessary steps and do all things to obtain a patent or
patents, at the Licensor's discretion, in respect of the Technology or
Present Technology and to provide proof of the existence of such patent(s)
to the Licensee on request. All costs in respect of obtaining patent(s)
relating to the Present Technology shall be borne by the Licensee. The
Licensor shall retain all rights and ownership of said patents.
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2.2 In connection with the License hereinbefore granted and for no additional
consideration except as may be set out in other agreements between one or
more of the Licensor, Licensee and other parties entered into of even date
herewith or in the future the Licensor agrees to furnish Licensee with:
(a) complete information on the methods of and apparatus for the
Technology and Present Technology heretofore developed by the
Licensor;
(b) specifications and prints or drawings in the possession of the
Licensor for all special equipment or apparatus employed in the
development of the Technology or Present Technology;
(c) technical assistance as required by the Licensee relating to the
Technology or Present Technology heretofore developed by the Licensor;
(d) instructions to personnel of the Licensee as to technical and other
matters required in connection with the Licensee's Research and
Development Program; and
(e) without limiting the generality of the foregoing, all of the know-how
(as defined in Section 1.1(d) hereof).
ARTICLE III
CONFIDENTIALITY AND OWNERSHIP
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3.1 The Licensor and Licensee acknowledge and agree with each other that all
information connected with the Technology, Present Technology, Developed
Technology, and research and development projects including without
limitation, all information, data, inventions, discoveries, improvements,
modifications or developments in any manner resulting from the work
performed by the Licensee pursuant to this Agreement, is confidential, and
the Licensee and Licensor covenant and agree with each other to use their
best efforts to ensure that such information does not become public
knowledge and undertake not to disclose such information or any part
thereof to any other person except to their respective employees,
consultants and subcontractors and the employees thereof as may be
necessary to carry out their respective rights and obligations under this
Agreement, and except to any party to a Research Agreement which has been
entered into by the Licensee and in respect of which the information
disclosed relates to a research and development project pursuant to such
Research Agreement, and except as may be required for their respective
financial reporting, income tax or regulatory purposes. The Licensee shall
upon request from the Licensor and at the cost of the Licensee cause its
employees, consultants and/or subcontractors to testify on behalf of the
Licensor in any action or proceeding relating to any research and
development project and to do all things necessary and proper for the
prosecution of any patent application and its maturity into a patent or for
the prosecution or defense of any patent issued. The Licensee shall cause
its employees, consultants and subcontractors to execute the Licensor's
Proprietary Rights and Confidentiality Agreement substantially in the form
attached hereto as Schedule "B", or in such form as the Licensor may
require.
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ARTICLE IV
EXCLUSIVE LICENSE TO USE
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4.1 In addition to the grant referred to in Section 2.1, the Licensor hereby
grants to the Licensee the sole and exclusive rights and license in the
Exclusive Territory for the term of this Agreement to use all the
technology developed by the Licensee or Licensor in connection with and to
manufacture, use, market and commercially exploit the Technology, Present
Technology, and Developed Technology. Provided this Agreement remains in
force, during such time in force the Licensor agrees not to manufacture,
use or market, directly or indirectly, the Technology, Present Technology
or Developed Technology in the Exclusive Territory.
4.2 The Licensee shall have the right to use any trademark or trade name of the
Licensor employed by the Licensor in connection with Technology, Present
Technology or Developed Technology, provided that the Licensor's
proprietary rights to such mark or name are shown as part thereof.
4.3 In consideration of the premises and other good and valuable consideration,
the Licensor hereby grants to the Licensee a license commensurate in scope
to that provided for in Section 4.1 hereof, to manufacture, use and market
any and all improvements or inventions in or to the Technology, Present
Technology or Developed Technology in the Exclusive Territory.
4.4 The Licensor hereby acknowledges that it is the intention of the Licensee
to sublicense the rights and licenses granted to the Licensee pursuant to
Sections 4.1, 4.2 and 4.3 to a one or more third parties (each hereinafter
referred to as a "Sublicensee") and the Licensor hereby consents, without
further notice, agreement or action, to such sublicensing and such further
sublicensing by the Sublicensee to a party (hereinafter referred to as the
"Sub-sublicensee) as may be necessary for the proper conduct of the
business of the Licensee and Sublicensee.
4.5 The Licensor hereby undertakes and agrees that it shall, at the request of
the Licensee, cause the Licensee, and any Sublicensee or Sub-sublicensee,
to be registered as a registered user of any and all trademarks, trade
names and patents comprising or utilized in connection with the Technology,
Present Technology, or Developed Technology, PROVIDED THAT the Licensee,
and Sublicensee or Sub-sublicensee shall show as part of the use thereof
the Licensor's proprietary rights to such trademark, trade name or patent.
The cost of any and all such registrations as registered user shall be
borne by the Licensee.
ARTICLE V
DEVELOPED TECHNOLOGY - PATENTS
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5.1 The parties acknowledge and agree that Developed Technology and know-how
relating thereto will arise from the research and development programs of
the Licensee carried on pursuant to the grant contained in Section 2.1 and
further
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acknowledge and agree that it is in their respective best interest to
ensure that patents are obtained in respect of the Developed Technology as
soon as practicable within the discretion of the Licensee during the course
of development of the Developed Technology and that as the Developed
Technology or any part of it reaches a stage of development appropriate for
application for a patent relating thereto, the Licensee shall transfer all
right, title and interest in such Developed Technology to the Licensor in
accordance with this paragraph and the Licensee shall continue to have the
exclusive rights to utilize such Developed Technology and know-how relating
thereto pursuant to this Agreement and the grant set forth in Section 2.1
and Section 4.1 hereto.
5.2 Following the transfer referred to in Section 5.1 each of the parties
hereto shall on two weeks advance notice make available for inspection
during normal business hours by the other party all of its laboratory and
production facilities relating to the Developed Technology and to instruct
the other party with respect to all techniques and know-how relating to
same. The parties agree to keep confidential and not to disclose to any
unlicensed party and confidential information. The party making a request
for the information shall bear all of the costs of preparation by the other
party of all drawings, specifications or other data not in possession of
the party requesting the same.
5.3 Following the transfer referred to in Section 5.1 the Licensor shall
promptly apply for patents in the name of the Licensor in Canada and the
United States and elsewhere as is deemed appropriate to protect the
Licensee's rights to exclusive use as set out herein with respect to the
Developed Technology and the know-how relating thereto all at the sole cost
and expense of the Licensee. In consideration therefor the Licensee shall
immediately advise the Licensor of any patentable matter or thing arising
or occurring during the development of the Developed Technology and shall
provide the Licensor with drawings, reports, models, plans, designs,
prototypes, drawings and documentation of every kind relating thereto all
at the sole cost and expense of the Licensee.
ARTICLE VI
TERMINATION AND OWNERSHIP
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6.1 Upon the occurrence of any of the following events, this Agreement shall
terminate in part, at the option of the Licensee:
(a) The dissolution or the liquidation of the assets of any of the parties
comprising the Licensor, or the filing of a petition in bankruptcy or
insolvency, or for an arrangement or reorganization by, for or against
any of the parties comprising the Licensor or the appointment of a
receiver or a trustee for all or a portion of the property of any of
the parties comprising the Licensor makes an assignment for the
benefit of its creditors or any act for or in bankruptcy;
(b) The assets or interest in this Agreement of any of the parties
comprising the Licensor being seized by a creditor and the same not
being released from seizure or bonded out within 30 days from the date
of notice of such seizure;
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(c) If any of the parties comprising the Licensor (as the case may in this
section 6.1, the "Defaulting Party") fails to perform any material
obligation under this Agreement and such failure continues for a
period of 30 days after receipt by the Defaulting Party of notice
thereof from the other party specifying such failure.
PROVIDED HOWEVER that in the event that the Licensor exercises its option to
terminate as set out hereinbefore then and in that event the Licensor undertakes
and agrees that such termination shall not affect in any manner whatsoever the
rights of any Sublicensee or Sub-sublicensee as defined hereinbefore and
existing as at the date of such termination and such Sublicensee or
Sub-sublicensee shall continue to be able to manufacture, use, market, and
commercially exploit the Technology, Present Technology and Developed Technology
pursuant to the terms of any sublicense or sub-sublicense agreement as if this
Agreement was still in full force and effect and no termination pursuant to this
Section had occurred.
6.2 Upon the occurrence of any of the following events this Agreement shall
terminate in part at the option of the Licensor:
(a) The dissolution or the liquidation of the assets of any of the parties
comprising the Licensee, or the filing of a petition in bankruptcy or
insolvency, or for an arrangement or reorganization by, for or against
any of the parties comprising the Licensee or the appointment of a
receiver or a trustee for all or a portion of the property of any of
the parties comprising the Licensee or if any of the parties
comprising the Licensee makes an assignment for the benefit of its
creditors or any act for or in bankruptcy;
(b) The assets or interest in this Agreement of any of the parties
comprising the Licensee being seized by a creditor and the same not
being released from seizure or bonded out within 30 days from the date
of notice of such seizure;
(c) The corporate existence of the Licensee being terminated;
(d) If the Licensee (as the case may be in this section 6.2, the
"Defaulting Party") fails to perform any material obligation under
this Agreement or under the Promissory Note, defined in section 8.3 of
this Agreement, and such failure continues for a period of 30 days
after receipt by the Defaulting Party of notice thereof from the other
party specifying such failure.
PROVIDED HOWEVER that the Licensor hereby undertakes and agrees that the
exercise of its option to terminate this Agreement shall operate solely as a
termination of the rights of the Licensee under this Agreement and shall not
affect the rights of any Sublicensee or Sub-sublicensee, as defined
hereinbefore, in any fashion whatsoever and for the better securing of this
undertaking the parties hereto undertake and agree that in the event of the
exercise of the option to terminate as set out hereinbefore, the interest of the
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Licensee in any sublicense agreement shall be deemed to have been assigned, on
the day prior to the exercise of such option by the Licensor, to the Licensor
and the Licensor shall be bound by all the terms and conditions of such
sublicense agreements as if the Licensor were the Sublicensor named therein and
this Agreement shall continue in full force and effect. No further action,
agreement or consent shall be required from the Licensee to give effect to such
assignment as set out hereinbefore.
6.3 All legal, beneficial and proprietary rights, title and interest in and to
the Technology, Present Technology and Developed Technology and any
research and development and all interim versions or development work
pertaining thereto, whether patentable or not including all information and
documentation relating thereto (collectively, the "Rights"), shall be the
sole property of the Licensor PROVIDED HOWEVER that the Rights shall be
limited to that portion of the research and development and all
improvements thereto, if any, developed up to and including the date of
termination.
6.4 The Licensee except as set out hereinbefore shall at its expense do or
cause to be done, all things necessary to enable the Licensor to register,
file, prosecute, maintain and protect trade secrets, copyrights, and
applications for patents and the patents issuing thereon, and to protect
the full ownership and right, title and interest in and to all the Rights.
6.5 The Licensor's ownership of the Rights shall not be construed as
restricting or affecting the use or ownership by the Licensee of:
(a) basic knowledge or technology used in any research or development; or
(b) the intellectual property of the Licensee used in the research and
development.
6.6 Termination of the rights of the Licensee pursuant to this Agreement shall
not release the Licensee from its obligation to provide complete
information to the Licensor concerning all Sublicense and Sub-sublicense
agreements prior to the effective date of such termination. The rights and
obligations of the Licensee under Section 3.1 and this Article VI of this
Agreement shall survive any such termination, except as expressly provided
herein.
ARTICLE VII
TRADEMARK AND PATENT INFRINGEMENT
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7.1 In the event that any or all of the trademarks, trade names, patents,
patents pending or trade secrets forming a part of the Technology and
Present Technology or which form a part of or may form a part of the
Developed Technology or know-how (hereinafter referred to as the "Patents
and Trademarks") becomes the subject of litigation the Licensor hereby
undertakes and agrees that it shall, at the cost of the Licensee, prosecute
and/or defend such litigation, as the case may be, to the fullest extent
possible including, but not limited to, all appeals possible in the event
of such litigation resulting in a decision which results in the prohibition
of the use of the Patents and Trademarks by the Licensee, or any
Sublicensee or Sub-sublicensee.
7.2 The Licensee shall have the right during the continuance of this Agreement
and subject to due compliance with the provisions of this Agreement and to
the execution of such further documents relating to the use of Trade Marks
as the Licensor may reasonably request, to use the Licensor's Trade Marks
in marketing the Technology within the Designated Territory and for the
purpose of describing itself as an official licensee of the Licensor and as
authorized to utilize the Technology.
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7.3 The Licensee agrees:
(a) to comply with all reasonable instructions issued by the Licensor
relating to the form and manner in which the Licensor's Trade Marks
shall be used and to discontinue immediately upon notice from the
Licensor any practice relating to the use of the Licensor's Trade
Marks which in the Licensor's opinion would or might adversely affect
the rights or interests of the Licensor or any Affiliate of the
Licensor; and
(b) not to contest the title of the Licensor (or any Affiliate company or
any person from whom the Licensor obtained its rights to the
Technology) to any Trade Marks, trade names, copyrights, patents or
any other form of proprietary right in connection with the Technology
not to effect any registrations thereof, and not to take any action to
the detriment of their respective interests therein; and
(c) for greater certainty, that as between the Licensee and the Licensor,
except with respect to the terminable licensed use of the Technology
under this Agreement, the Licensor retains the exclusive ownership of
all right, title, benefit and interest in and to the Technology, and
each and every improvement, enhancement, development of configuration
thereto or thereof, each and every new, variant or other application
thereof and all other rights, benefits and interests whatsoever,
whether in rem or personal, of every description or kind, whensoever,
howsoever or wheresoever derived or arising, attributable or relative
thereto.
7.4 The Licensee shall promptly disclose to the Licensor for its ongoing use
and the use of its licensees, all particulars of any improvement or further
invention applicable to any of the Technology which is made or discovered
by the Licensee or any of its employees or agents, or which comes to the
Licensee's knowledge (whether or not the same be patented or patentable).
The Licensor shall disclose any Improvements, when made or developed from
time to time hereafter, to the Licensee for its ongoing use and the use of
its permitted licensees, if any. For the purposes of this paragraph,
"Improvements" means any and all improvements, enhancements, changes and
modifications discovered or made by the Licensor to the Technology,
patents, know-how and related materials and documentation and only as these
Improvements relate to the patents referred to in Recital A herein and only
in regard to the applications of the Technology specifically licensed to
the Licensee pursuant to this Agreement.
7.5 All future improvements, changes or developments to or in the Technology,
whether such improvements, changes or developments are designed or created
by the Licensor or the Licensee or its employees or agents shall be the
sole and exclusive property of the Licensor. Any improvements, changes or
developments relating to the Technology, which may be designed or developed
by the Licensee or its employees or agents, shall not be employed and/or
used by the Licensee or its permitted assigns without prior written
approval thereto by the Licensor's designated engineers or other nominees.
The Licensee shall promptly provide to the Licensor written notice of all
such proposed improvements, changes or developments immediately upon their
design or development.
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7.6 The Licensor and the Licensee acknowledge and agree with each other that
all information connected with the Technology including without limitation,
all information, (whether or not it is in the public domain) data,
inventions, discoveries, improvements, modifications, developments,
technical manuals, or process-flow manuals and data is confidential, and
the Licensee and the Licensor covenant and agree with each other to use
their best efforts to ensure that such information does not become public
knowledge and undertake not to disclose such information or any part
thereof to any other person except to their respective consultants,
sub-contractors and employees as may be necessary to carry out their
respective rights and obligations under this Agreement, and except as may
be required for their respective financial reporting, income tax or
regulatory purposes. The Licensee shall, upon request from the Licensor and
at the cost of the Licensor, use the Licensee's best efforts to cause the
Licensee's employees and sub-contractors to testify on behalf of the
Licensor in any action or proceeding relating to the prosecution of any
patent application and its maturity into a patent or for the prosecution or
defence of any patent issued. The Licensee hereby further covenants and
agrees with the Licensor that the Licensee shall require each and every one
of its directors, officer, employees, consultants, or sub-contractors who
are provided with any information in respect of the operation of the
Technology or related knowledge to sign confidentiality agreements with the
Licensee and the Licensor which shall be in a form acceptable to the
Licensor.
7.7 This Agreement shall not be void or terminated by reason only that all or
any of the trade marks, trade names, patents, or trade secrets forming a
part of the Technology or related know-how are found to be unenforceable or
invalid, provided that if any such litigation results in the prohibition of
the use of the Technology by the Licensee within the Designated Territory
then this Agreement shall terminate, provided that in no event shall the
Licensor be liable for any economic loss or loss of profits suffered by the
Licensee or by anyone claiming against or through the Licensee.
7.8 The Licensee shall not during the term of this Agreement and for a period
of five (5) years after its rights to use all or any part of the Technology
terminate either alone or in partnership or jointly or in conjunction with
any person or persons, including without limitation, any individual, firm,
association, syndicate, company, corporation or other business enterprise,
as principal, agent, shareholder, or in any other manner whatsoever, carry
on or be engaged in or concerned with or interested in or advise, lend
money to, guarantee the debts or obligations of or permit its name to be
used or employed by any person or persons, including without limitation,
any individual, firm, association, syndicate, company, corporation or other
business enterprise, engaged in or concerned with or interested in an
operation or undertaking which is in any way competitive with the business
of the Licensor as it relates to the Technology without having obtained the
express written consent of the Licensor. The Licensee specifically
acknowledges the geographical restriction contained herein is reasonable
and necessary due to the nature of the Licensor's Technology.
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7.9 Subject to the terms of Section 7.10, the Licensor shall defend or settle,
at its own expense, any claim, demand, proceeding or action made or brought
against the Licensee to the extent that the claim, demand, proceeding or
action is based on a claim relating to the Licensor's ownership or
authority to license the Technology or any part thereof to the Licensee, or
that the manufacture, license, operation or use of the Technology provided
by the Licensor pursuant to this Agreement infringes on any Canadian,
United States or other patent rights, copyrights, trade mark or service
mark rights, or other intellectual or industrial proprietary rights or
constitutes a misappropriation of a trade secret or confidential
information or a disclosure of a trade secret or breach of confidence of
others.
7.10 The defence, settlements and payments referred to in Section 7.9 herein are
expressly conditioned on the following:
(a) that the Licensor is notified promptly in writing by the Licensee of
any such claim, demand or action;
(b) that the Licensor is granted in writing sole control of the defence of
any such claim, demand or action and of all negotiation for its
settlement, or
(c) that Licensee cooperates with the Licensor in a reasonable way to
facilitate the settlement or defence of the claim, demand or action;
and
(d) that the claim does not arise from modifications to the Technology not
authorized in writing by the Licensor or from the use or combination
of products provided by the Licensor with items provided by Licensee
or others or from any other action by the Licensee not authorized by
the Licensor.
ARTICLE VIII
PAYMENTS
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8.1 The following terms have the following meanings:
(a) "Appointment Fee" means the sum of One Million US Dollars
(US$1,000,000);
(b) "Collective Technologies" means the Technology, the Present Technology
and Developed Technology, collectively;
(c) "Effective Date of this Agreement" means the date first appearing on
page one hereof;
(d) "End Products" means any commercially valuable products created from
any application of any of the Collective Technologies;
(e) "Gross Revenue" means all revenue received or accrued by the Licensee
or any other party deriving its rights, directly or indirectly, from
or through the Licensee from any source earned from the application of
any portion of the Collective Technologies including, without
limitation, revenues from front-end charges, revenues from the sale,
construction, rent, lease, processing charges or other use of
engineering, technology, facilities and from any other use of the
Collectively Technologies or portion thereof within the Exclusive
Territory, and from the sale of End Products produced from the
application of any of the Collective Technologies within the Exclusive
Territory, including the value of all End Products produced by the
Licensee or all of the users authorized by the Licensee or other such
parties deriving rights as aforesaid within the Exclusive Territory,
but shall not include customer refunds, adjustments, sales taxes or
other taxes collected from customers of End Products for transmittal
to the appropriate taxing authority;
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(f) "Laws" means all applicable laws, regulations, by-laws, codes,
orders-in-council, or other governmental provisions, however
designated, whether federal, provincial, state, regional or local, and
whether legislative, judicial or administrative in origin, including
without limitation all requirements and conditions, however
designated, under all permits or certificates of approval applicable
at any time to a Plant. The term "Laws" is also deemed to included all
relevant codes, standards, guidelines and criteria of professional
engineering societies, institutes or associations applicable to any
part of a Plant as well as those of underwriters and fire prevention
bodies;
(g) "Gross Revenue Royalty" means a royalty equal to TWO AND ONE-HALF
PERCENT (2.5%) of Gross Revenue;
(h) "Plant" means a plant (and "Plants" means all such plants) employing
of one or more elements of the Collective Technologies; and
(i) "Trade Marks" includes DuroZyme Plant(TM), 3SF Technology(TM) and all
other insignia, labels, slogans and other identification schemes,
trade marks, service marks, trade names, industrial design, copyrights
and applications therefor that may be owned now or hereafter or used
from time to time by the Licensor in association with any portion of
the Collective Technologies.
8.2 The Licensor shall have the right, but not the obligation, at its own
expense, to supervise or inspect the operation of any Plant in the
Exclusive Territory so as to ensure that all of the Licensor's
specifications and standards have been met.
8.3 The Licensee will, upon execution of this Agreement, pay the Appointment
Fee to the Licensor in cash, or at the discretion of the Licensor, the
Licensor may elect to accept therefor a demand promissory note (the
"Promissory Note") made jointly and severally by the Licensee and its
parent corporation, Duro Enzyme Products Inc., for the full amount of the
Appointment Fee, together with interest as may be agreed and set out in
such Promissory Note. The Appointment Fee is in addition to the Gross
Revenue Royalty.
8.4 As further consideration for the license rights hereby granted, the
Licensee shall pay to the Licensor the Gross Revenue Royalty. The Gross
Revenue Royalty shall be paid to the Licensor on a quarterly basis within
thirty (30) days of the completion of each fiscal quarter of the Licensee.
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8.5 The Licensee shall provide to the Licensor audited financial statements and
other documentation disclosing the amount of Gross Revenues from the use of
the Collective Technologies and the Plants. The audited financial
statements and other documentation shall be delivered to the Licensor
within one hundred and twenty (120) days of the Licensee's fiscal year end.
The Licensee shall grant, and does hereby grant, to the Licensor the right
to have its duly authorized representatives attend at the premises of the
Licensee during normal working hours to examine all financial records of
the Licensee for the purpose of verification of the Gross Revenues, as and
when the Licensor advises the Licensee in writing of its intention to seek
such access. The Licensor shall deliver to the Licensee written notice of
its desire to review the Licensee's financial records relating to this
Agreement, which written notice shall be delivered to the Licensee no less
than three (3) business days prior to the date of such review by the
Licensor, which review shall be at the expense of the Licensor and the
Licensor shall only have the right to conduct such a review two times
during any twelve (12) month period.
8.6 The parties hereto agree that within thirty (30) business days of the
delivery of the audited financial statements and other relevant
documentation, the parties shall, if required, adjust the amount of the
royalty payments paid by the Licensee to the Company pursuant to Section
8.4 herein. If the Licensee has overpaid the Licensor, the Licensor shall
credit against future payments or, at the Licensor's option, reimburse the
Licensee within thirty (30) days of receipt of notice of such overpayment.
If the Licensee has underpaid the Licensor, the Licensee shall pay the
Licensor the amount of such underpayment within thirty (30) days of receipt
of notice of such underpayment.
8.7 All sums payable by the Licensee to the Licensor hereunder shall:
(a) be paid when due hereunder without prior demand therefor and without
any set-off, compensation or deduction by the Licensee whatsoever; and
(b) if not paid when due, bear interest at a rate equal to the prime rate
of interest charged by Royal Bank of Canada, Vancouver Main Branch,
plus six percent (6%) per annum, all without prejudice to any other
right or remedy of the Licensor.
ARTICLE IX
GENERAL
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9.1 This Agreement shall not be assignable by either party without the prior
written consent of the other party, such consent not to be unreasonably
withheld.
9.2 This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall
constitute one and the same document.
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9.3 This Agreement shall ensure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
9.4 Each of the parties shall execute such further and other documents and
instruments and do such other things as may be necessary to implement and
carry out the intent of this Agreement.
9.5 This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia, excluding its laws concerning
conflicts of laws, which shall be deemed to be the proper law hereof. The
Courts of British Columbia shall have jurisdiction (but not exclusive
jurisdiction) to entertain and determine all disputes and claims, whether
for specific performance, injunction, declaration, or otherwise howsoever
both at law and in equity, breach, or alleged, threatened or anticipated
breach of this Agreement and shall have jurisdiction to hear and determine
all questions as to the validity, existence or enforceability thereof.
9.6 This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto or by their successors or assigns.
9.7 No condoning, excusing or waiver by any party hereto of any default, breach
or non-observance by any other party hereto at any time or times in respect
of any covenant, proviso or condition herein contained shall operate as a
waiver of that party's rights hereunder in respect of any continuing or
subsequent default, breach or non-observance, or so as to defeat or affect
in any way the rights of that party in respect of any such continuing or
subsequent default, breach or non-observance, and no waiver shall be
inferred from or implied by anything done or omitted to be done by the
party having those rights.
9.8 All notices, demands and payments (the "notice") required or permitted to
be given hereunder shall be in writing and may be delivered personally,
sent by telegram or telex or may be forwarded by first class prepaid
registered mail to the addresses set forth herein:
If to the Licensor:
To the address shown on page 1 of this Agreement
If to the Licensee:
To the address shown on page 1 of this Agreement
Any notice delivered or sent by telegraph or telex shall be deemed to have
been given and received at the time of delivery. Any notice mailed as
aforesaid shall be deemed to have been given and received on the expiration
of 48 hours after it is posted as addressed above or at such other address
or addresses as may from time to time be notified in writing by the parties
hereto provided that if there shall be a mail strike, slowdown or other
labor dispute which might affect the delivery of such notice by the mails,
then such notice shall only be effective if actually delivered.
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9.9 All references to any party to this Agreement shall be read with such
changes in number and gender as the context hereof or reference to the
parties hereto may require.
9.10 Should any part of this Agreement be declared or held invalid for any
reason, such invalidity shall not affect the validity of the remainder
which shall continue in force and effect and be construed as if this
Agreement had been executed without the invalid portion and it is hereby
declared the intention of the parties hereto that this Agreement would have
been executed without reference to any portion which may, for any reason,
be hereafter declared or held invalid.
9.11 Any and all agreements, undertakings, covenants and promises set out herein
to be performed by the Licensor shall be joint and several between all the
parties comprising the Licensor.
9.12 Each party confirms and agrees that it has been duly advised (and fully and
fairly informed with respect to such matters) to obtain all necessary and
independent legal, accounting, taxation, financial and other applicable
professional advice and counsel prior to entering to this Agreement and the
transactions referenced herein. Each such party has either obtained all
such advice and counsel or has determined to its own satisfaction, having
been fully and fairly informed therein, not to seek such advice and
counsel.
9.13 If any dispute, difference of opinion or question shall arise between the
parties or any of their legal representatives concerning the construction,
meaning or effect of this Agreement, or anything in this Agreement
contained, or the rights of the parties in this Agreement, the resolution
of such dispute, difference, or question shall be governed by the following
terms and conditions:
(a) every such dispute, difference or question shall be referred to a
single arbitrator, if the parties or their legal representatives agree
on one, but if within five (5) days after a party serves notice
requiring an arbitration, the parties cannot agree on an arbitrator,
then the arbitrator shall be appointed by a Justice of the Supreme
Court of British Columbia on the application of any party to the
dispute on notice to the other(s). The arbitrator shall conduct the
arbitration under the Commercial Arbitration Act (British Columbia)
and every award or determination shall be binding on the parties,
their heirs, legal personal representatives, successors and assigns,
and shall be a condition precedent to any action in law or in equity
relating to this Agreement other than one to compel arbitration under
this Agreement;
(b) in any such dispute, difference or question, the arbitrator shall be
allowed unfettered and unlimited discretion to determine in each and
every case the solution which best balances the competing interests of
the parties to the arbitration and shall not be bound by any legal
precedent in such determination; and
(c) the arbitrator shall not be bound by the provisions of the Commercial
Arbitration Act (British Columbia) in respect of fees. The arbitrator
shall be entitled to award all or part of the fees against any party
in accordance with the principles which govern an award of costs
against a non-successful party in a contested matter before the
Supreme Court of British Columbia. In the absence of such an award by
the arbitrator, the arbitrator's costs shall be borne equally by the
parties without regard to their involvement in the arbitration.
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9.14 If the parties shall fail to meet their respective obligations hereunder
within the time prescribed, and such failure shall be caused or materially
contributed to by force majeure (and for the purposes of this Agreement,
force majeure shall mean any act of God, strike, lock-out or other
industrial disturbance, sabotage, or blockades, insurrections, riots,
epidemics, lightning, earthquakes, floods, storms, fires, washouts, nuclear
and radiation activity or fallout, arrests and restraints of rules and
people, civil disturbances, explosion, breakage or accident to machinery or
stoppage thereof for necessary maintenance or repairs, inability to obtain
labour, materials or equipment, any legislative, administrative or judicial
action which has been resisted in good faith by all reasonable means, any
act, omission or event whether of the kind herein enumerated or otherwise
not within the control of such party, and which by the exercise of due
diligence such party could not have prevented, but lack of funds on the
part of such party or parties shall be deemed not to be a force majeure)
such failure shall be deemed not to be a breach of the obligations of such
party but such party shall use best efforts to put itself in a position to
carry out its obligations hereunder and the time for performance of
obligations hereunder shall be extended for the length of time that the
force majeure shall have continued.
IN WITNESS WHEREOF the parties hereto have duly executed and delivered this
Agreement.
THERMO ENZYME PRODUCTS INC. by its
/s/ Rene J. Branconnier
------------------------
Authorized Signatory
DURO ENZYME SOLUTIONS INC. by its
/s/ Rowland Wallenius
----------------------
Authorized Signatory
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SCHEDULE "A"
SUMMARY OF PARTICULARS CONCERNING DUROZYME PLANTS
AND 3SF TECHNOLOGY
The 3SF Technology embodies the Licensor's DuroZyme Process, a unique process
with the following key features:
- Selective, aerobic, high temperature (50-90C) microbial culturing process
applicable to any scale
- Odour free
- Continuous process wherein culture media overflows from the last
fermentation vessel, connected in series, as raw material is added to the
first
- Rapid throughput of as little as 18 hours
- Selectively carried out as, but not limited to, a 3-stage process: any
number of fermentation vessels can be connected in series
- Input raw organic materials derive from specific sources to ensue a pure
food supply for the microorganisms being cultured
- Input of specific raw organic materials leads to selection of specific
high temperature microorganisms - from the mixed number that are in or on
the raw materials themselves - that favour the specific inputted organic
materials as food sources
- In utilizing the specific input raw organic materials as food, specific
enzymes are produced
- Enzyme products are stable to prevailing culturing conditions, and
especially to high temperatures (50-90C)
- Specific enzymes produced are recovered from the fermented end product
first by separation of solids from liquid, then recovery of enzymes from
the liquid fraction
- The bulk solids recovered from the fermented organic material, rich in
macro- and micronutrients, specific enzymes and microorganisms, are
produced for a range of applications including as growth enhancement
agents, feed and fertilizer products, in liquid or dried form.
- Specific enzymes produced and recoverable include but are not limited to
those that breakdown protein, starch, pectin, cellulose, fiber, fats and
lipids; the full range of different known enzyme types can be produced
- 100% Natural process and products - no chemical additives used
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The 3SF Technology and DuroZyme Process are delivered by way of compact,
environmentally friendly plants. These plants contain the range of systems
needed to facilitate culture of thermophiles and production of enzymes therefrom
by providing an environment that is optimized for their growth/production,
including:
- Raw material receiving and handling systems
- Hyropulpers for raw material slurry production
- Pumping systems for material transit/transport
- Air handling and scrubbing systems
- Fermenters connected in series, equipped with mixers and aerators
- Heating systems for heating to and maintenance of culture media at a
minimum 65C
- Concentrators/evaporators for water removal from slurried raw material
and/or the fermented end product
- Condensers for recovery of water and volatiles
- Water purification equipment
- Centrifuge or filtration systems, including but not limited to micro-,
ultra- and nanofiltration equipment, for solids-liquid separation
- Enzyme recovery and purification systems including but not limited to
chromatography, isoelectric focusing, and phase partition equipment
- Conventional forced hot air drying and freeze-drying equipment for
production of dried end products
- Packaging and bulk handling systems for packaging of end products
- Loading dock and end product storage systems
- Process monitoring equipment and control systems
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SCHEDULE "B"
PROPRIETARY RIGHTS AND CONFIDENTIALITY AGREEMENT
I, ___________________________________, the undersigned, hereby acknowledge and
agree that:
1. I will be working areas of research and development the details of which
will be critical to the sources of future commercial exploitation of the
processes, products or developments arising from such research and
development;
2. All information connected with the conduct of the research and development
including without limitation, all information, date, inventories,
discoveries, improvements, modifications or developments in any manner
resulting from the research and development work performed by myself
(hereinafter collectively referred to as the "Research") is strictly
confidential and proprietary and shall not be revealed or disclosed to any
other person except authorized employees, consultants and subcontractors of
Thermo Enzyme Products Inc. or Duro Enzyme Solutions Inc. as may be
necessary to carry out the research and development.
3. All legal, beneficial and proprietary rights, title and interest in and to
the Research and all development work or interim versions pertaining
thereto, whether patentable or not (hereinafter collectively referred to as
the "Rights"), including all information and documentation relating
thereto, shall be the sole property of Thermo Enzyme Products Inc. and Duro
Enzyme Solutions Inc. as their respective interests exist.
4. I will, at the request of either or both of Thermo Enzyme Products Inc. and
Duro Enzyme Solutions Inc. testify on such party's or parties' behalf in
any action or proceeding relating to the Research and do all things
necessary and proper for the prosecution of a patent application and its
maturity into a patent or for the prosecution or defense of any patent
issued which arises from the Rights.
5. I am of the full age of 19 years and am not under any disability which
would prevent me from reading and understanding the nature of the
undertakings set out herein and I have been afforded the opportunity to
read and review this Agreement with advisors of my choice and I fully
understand the undertakings of myself set out herein.
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Executed at , British Columbia, the ___ day of ___________, .
SIGNED, SEALED AND DELIVERED )
in the presence of: )
)
--------------------------- )
Name )
)
--------------------------- ) ------------------------------------------
Address )
)
--------------------------- )
)
--------------------------- )
Occupation )
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